Increase In The Ceiling Of 13th Month Pay And Other Benefits

Currently the annual limit for 13th month pay and other benefits is pegged at 30,000 PHP. That is, if you aggregate your monthly benefits given by your employer in one year and add your 13th month pay, and the sum is 30K or less, you are lucky enough to take it all home free from taxes. If you have above 30K, then surely it’s taxable.

A senator has proposed a senate bill to effect some changes to this rule under Senate Bill No. 256. The bill hopes to increase the current ceiling from 30K to 75K and arguing that the 30K limit is too old and needs to get updated. If you happen to be one of the few who receives that amount of 13th month pay and other benefits, it is only fitting that you celebrate as soon as this bill moves.

I said “few” because I think this bill albeit beneficial to employees, will only be directly useful to employees in the middle to upper levels of management. In the present workforce, how many employees are actually earning that amount of 13th month pay and other benefits? Or, how many minimum wage earners and “above minimum-low income” earners, which comprises the majority, will actually get excited about this?

This may even legitimize corrupt practices in private companies because they no longer have to hide their bonuses and benefits in excess of the 30K limit to avoid taxes. Corruption is not only prevalent in the government, corruption is everywhere. If you will look closely, there are companies which employ “schemes” in order not to surpass that ceiling or any other ceiling for that matter.

I would rather encourage bills that would directly impact majority of the masses. Laws to decrease individual income tax rates, increase personal exemptions, increase additional exemptions or increase minimum wage. These kind of bills are the ones that can effortlessly garner support from the people and by all means help taxpayers large and small.